TCII :: Management Consultants
Building Profitable Business
Within 12 months the client had cleared his overdraft, got his debtors under control, secured three major new contracts, increased turnover to £2.2 million and doubled his profits.
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Doubling the profits and getting back in control
Over 10 years, a burglar alarm and CCTV installation business had built up an annual turnover of around £1.5 million. But the business had a substantial overdraft and the owner, who was still personally fitting alarms, was worried that his profitability was low and decreasing.
Our challenge
We began by understanding the cost and profit drivers in the business and then implemented a plan that would generate profitable, sustainable, growth.
What we did
An examination of the accounts showed that our client wasn’t allocating his costs and income against his different types of business. A new system was set up to allow him to break down the numbers into his key business areas.
As a result, it became clear that one business area was unprofitable. A plan to phase-out the unprofitable business over six months was set up and implemented.
A system of chasing overdue debts was established with responsibility given to one person. This resulted in an immediate improvement and reduced the need to use the overdraft facility.
An examination of the sales process revealed that the key sales person, due to a heavy admin load, was only spending 45 per cent of his time in the field selling. By reallocating admin responsibilities, this went up to 70 per cent and improved sales were seen within the first two months.
A business development plan was produced. This included expanding the business to cover multi room music and video systems, since the wiring and installation requirements were almost identical to those the client provided through his existing business. He could therefore offer this added value service at a highly competitive but profitable rate and establish a clear advantage over local competitors.
Finally, a weekly and monthly monitoring and control system was implemented to check and correct progress against plan.
The outcome
Within 12 months the client had cleared his overdraft, got his debtors under control, secured three major new contracts, increased turnover to £2.2 million and doubled his profits.
"Looking at the results that TCii were able to generate by working for us for two days each month, it is clear that I should have done this years ago. With a small business like ours we cannot afford to employ top quality managers but through TCii we now have cost-effective access to the skills we need to drive the business forward."
Clive Bailey – Managing Director and Owner.
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